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New import rules on rough diamonds leave traders in a tizzy

Date: 23-05-2019
Subject: New import rules on rough diamonds leave traders in a tizzy
Kolkata: The diamond trade is in a tizzy following a Mumbai Customs directive outlining new procedures for importing rough diamonds, which seek details on origin, size, shape, type, colour and clarity of the precious stones from overseas. 

The fear is that even a minute discrepancy in the norms may lead to seizure, followed by a huge penalty, which could affect manufacturing activity in Surat, the country’s diamond cutting and polishing hub. 

The Office of the Commissioner of Customs, Mumbai, has also directed the trade to furnish details of rough diamonds declared for export, to determine their value. It said that “it is also the obligation of the importer/ exporter to state these details in the bills of entry/shipping bills filed for the clearance of such goods.” 

In the note, the customs department has cited recent incidents of suspected mis-declaration of values of both imported and exported rough diamonds.It said the description of diamonds, stated in the documents filed for clearance, is often incomplete. In most cases, the goods are merely described as rough diamonds, with no other qualifying details. 

The trade, however, has taken a different view. “There is no regulatory standard or industry standard for a uniform and consistent description of the details sought by the customs,” said Sabyasachi Ray, executive director of the Gem and Jewellery Export Promotion Council (GJEPC). “Now, if customs finds some discrepancy, there will be seizure of the goods. The authority may seek huge penalties and there will be inordinate delay in clearing the goods,” Ray told ET. 

It may also affect manufacturing activity in Surat and lead to job loss, he said. 

“In the last six months, almost every 15 days new notifications have been issued, show causes have been issued on technical grounds and the trade has faced lot of harassment. We fear that trade may shift to other countries like China if this continues,” Ray said. 

India imported 1,650.18 lakh carats of rough diamonds, valued at $15.72 billion, in the just-concluded financial year. Rough diamond imports fell 17 per cent in value terms, indicating less demand for cut and polished diamonds due to the imposition of IGST. Cut and polished diamonds worth $23.82 billion in value terms were exported in fiscal year 2019, according to data from industry body GJEPC . 

Industry executives said exporters simply did not possess the details sought by customs, as rough diamonds are a run-of-the-mine natural mineral product characterised by natural, geological divergences and lack of homogeneity. 

The manner in which rough diamonds are priced vary widely even among members of the diamond trade, they said. 

For example, in an auction for a consignment of rough diamonds, prices as varied as 30 per cent to 40 per cent would be quoted by experts from the same trade, they added. 

Source: economictimes.indiatimes.com

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